ProfitShare Partners the South African fintech SME and capital provider secured a $5m sum from the South Africa SME fund. The funding will help it partner with small and medium-sized businesses in their aim for accelerated growth.
ProfitShare Partners provides alternative funding avenues for SMEs which have a contract with a reputable government department or company. This ensures that the SME’s can fulfill their contracts which helps them expand their resource pool and achieve exponential growth.
ProfitShare Partners is regarded as a fintech disruptor whose impact has thus far assisted over 100 SME’s since inception. The experience has equipped them with the right set of tools responsible for the tenfold growth in funding within 2 years.
The South African SME Fund examined the business model of ProfitShare and found it satisfactory. The same applies to the funds’ impact on SME growth. The R100-million funding helped in speeding SME growth in the country.
Ketso Gordhan, the CEO of SA SME fund explained how their investment into ProfitShare comes at a time when the SME sector is vulnerable and exposed. He pointed out “access to working capital” and “availability of funding” as major challenges affecting SMEs. PSP will offer an “alternate funding model” vital for the SME “survival and growth.”
Data from the National Planning Commission that focusses on the economic recovery of small businesses shows 92% of them struggling. It is also estimated that over 50,000 SMEs will shut down due to covid19.
Andrew Maren, Founder, and CEO of ProfitShare Partners termed the partnership as a “great win for SMEs”
How is ProfitShare Partners run?
PSP can be described as a blend between venture capital and private equity, excluding the part of share acquisition. They only partner for a specific transaction and provide both the capital and business support to see it succeed.